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If President Obama has his way the Securities and Exchange Commission will get a 28% budget increase for fiscal year 2012.

That would bring the SEC’s budget to $1.4 billion- a number SEC chair Mary Schapiro is happy with.

Republicans are probably not. In fact, Republicans in the House of Representatives proposed cuts on Friday that would slash the SEC’s current $1.1 billion budget by $25 million.

I’m not convinced the SEC would perform any better with or without those cuts. But when I look at the proposed $1.4 billion budget and then look at everything the SEC is expected to regulate, it’s a bit frightening.

Here are Schapiro’s own words in a 2009 testimony before the subcommittee on Financial Services and General Government Committee on Appropriations:

The SEC oversees more than 30,000 registrants including 12,000 public companies, 4,600 mutual funds, 11,300 investment advisers, 600 transfer agencies, and 5,500 broker dealers. We do this with a total staff of 3,600 people.

In contrast, here’s a list of some of the ways Wall Street banks have spent their billions.

Bank of America’s 2010 marketing expenses: $2 billion. Marketing expenses in the three months ending Dec 31 2010 were roughly half of the SEC’s budget with $484 million spent.

JPMorgan’s litigation reserves: $4 billion as of the third quarter 2010. Yes-that means the money JPM is saving so it can fight or settle lawsuits is 4x the size of what the SEC has to regulate the entire securities industry.

More on JPM. The House of Dimon spent $1.2 billion in October, November and December 2010 on technology, communications and equipment expenses. Three months. (I know. JPM is a global bank with tech demands that I can't begin to fathom. Well, I'll say this: The bank's technology wasn't good enough to catch the Madoff scheme happening right under its nose. Or was it?)

I know compensation might be an unfair comparison especially when we’re talking Wall Street but it’s worth a laugh in this scenario. Goldman Sachs spent $2.3 billion in the fourth quarter of 2010 (again, just 3 months) on compensation and benefits. Of course, Lloyd Blankfein’s talented herd of bankers are among the highest paid in the world, and Mary Schapiro’s employees are just human.

Let’s get a little Morgan Stanley in here. Its 16,000+ brokers with Morgan Stanley Smith Barney manage $1.7 trillion in client assets. That’s $1.7 trillion in retail client assets, by the way. Luckily, the SEC has the assistance of FINRA to help regulate all those brokers. FINRA. You know? That entity whose members are the banks/brokerages it’s supposed to be regulating. That FINRA.

Back to the vampire squid. Goldman Sachs paid a $550million fine last year. That fine actually makes up HALF of the SEC’s budget. The settlement was related to a “shitty deal” Goldman was selling on sub-prime loans. No worries, Goldman made $3.1 billion in the first three months of that year.

When Bank of America “discovered” that it had actually bought a rotting Merrill Lynch 2009, the government gave it a $20 billlion TARP loan to shut up and deal with it. Oh, the miraculous discovery of loan losses in Merrill’s books were worth about $15 billion.

Citi Never Sleeps. (Unless you count the years leading up to its near collapse.) That comforting tagline among other marketing and advertising cost the bank $1.6 billion in 2010.

So now that the SEC is forcing hedge funds to register information (size, strategy, etc.) it will also be responsible for a little regulation of the industry. Yes, the SEC will attempt to regulate one of the most opaque areas of the financial world, and one that is getting bigger every quarter. In the fourth quarter of 2010, the hedge fund industry added $149 billion in new assets. Nothing a little mandatory SEC registration can’t tackle.

Here’s an expense not related to Wall Street. Americans spent $4.7 billion on beer, wine and liquor in the month of December 2010. Cheers.